LUGPA Policy Update - CMS Announces Negotiated Drug Prices under the Inflation Reduction Act

On August 15^th, CMS released the negotiated prices for ten drugs selected for price negotiations under the Inflation Reduction Act (IRA). These drugs, which are among the most costly and widely prescribed within the Medicare program, treat conditions such as heart disease, diabetes, and cancer.

In 2023, CMS identified these drugs for negotiation under the IRA, which was signed into law in August 2022 with the goals of expanding Medicare benefits, reducing drug costs, and improving the sustainability of the Medicare program. Previously, these drugs represented a significant portion of Medicare Part D expenditures, leading to substantial out-of-pocket patient costs.

The negotiated prices aim to reduce costs for Medicare beneficiaries. For example, the price of dapagliflozin, a drug used to treat type 2 diabetes, heart failure, and chronic kidney disease, will decrease by 68%, from $556 to $179. Similar reductions have been negotiated for other medications, with price decreases ranging from 38% to 79%. The negotiated prices will take effect on January 1, 2026. The price reductions are projected to save Medicare $6 billion in the first year.

List of Drugs and Their Negotiated Prices:

• Sitagliptin (Januvia): For type 2 diabetes; original price $527, negotiated price $113 (79% decrease)
• Insulin Aspart Injection (NovoLog, among others): For diabetes mellitus, original price $495, negotiated price $119 (76% decrease)
• Dapagliflozin (Farxiga): For type 2 diabetes, heart failure, and chronic kidney disease; original price $556, negotiated price $179 (68% decrease)
• Etanercept (Enbrel): For rheumatoid arthritis; original price $7,106 [$1,777 per weekly dose], negotiated price $2,355 (67% decrease)
• Empagliflozin (Jardiance): For type 2 diabetes and heart failure; original price $573, negotiated price $197 (66% decrease)
• Ustekinumab (Stelara): For Crohn's disease, ulcerative colitis, psoriasis, and psoriatic arthritis; original price $13,836, negotiated price $4,695 (66% decrease)
• Rivaroxaban (Xarelto): To prevent blood clots and reduce risks for patients with coronary or peripheral artery disease; original price $517, negotiated price $197 (62% decrease)
• Apixaban (Eliquis): To prevent stroke and blood clots; original price $521, negotiated price $231 (56% decrease)
• Sacubitril/Valsartan (Entresto): For chronic heart failure; original price $628, negotiated price $295 (53% decrease)
• Ibrutinib (Imbruvica): For chronic lymphocytic leukemia/small lymphocytic lymphoma and other blood cancers; original price $14,934, negotiated price $9,319 (38% decrease)

CMS plans to select up to 15 additional drugs for negotiation annually starting in 2027, with further expansions in subsequent years. This approach is intended to address the cost and accessibility of essential medications within Medicare.

The CMS announcement represents a significant development in the ongoing efforts to manage drug costs within Medicare. LUGPA will continue to monitor these changes and assess their impact on urology practices and patient care.

A Fact Sheet on the ten drugs is available here: https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf.